Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hita.edu/webapps/assessment/take/launch.jsp?course_assessment_id=_114822_1&course_id=_89168_1&content_id=_2391361_1&step=nu QUESTION 14 The FIN340 Company is evaluating the purchase of 2 competing machines and wants to choose the machine with the lower equivalent annual

image text in transcribed
hita.edu/webapps/assessment/take/launch.jsp?course_assessment_id=_114822_1&course_id=_89168_1&content_id=_2391361_1&step=nu QUESTION 14 "The FIN340 Company is evaluating the purchase of 2 competing machines and wants to choose the machine with the lower equivalent annual cost (EAC); Machine A has an upfront purchase price of $380,000, an annual operating cost of $22,800 and a machine life of 5 years.; Machine B as an upfront purchase price of $475,000, an annual operating cost of $23,750 and a machine life of 7 years; If our company has a WACC of 11.6%, which machine has the lower equivalent annual cost (EAC) and what is its EAC? "Machine A/EAC = $463,010" "Machine B/EAC = $584,778 "Machine A/ EAC = $127,173 "Machine A / EAC = $126,514 "Machine B / EAC = $127,173" "Machine B/EAC = $126,514" Insufficient data provided to compute answer OOOOOOO QUESTION 15 "The FIN340 Company bonds are current trading at 103.0% of par (Par Value is $1,000) with exactly 15 years remaining until maturity and a 5.6% coupon rate; The company's tax rate is 21.0%. What is the company's After-Tax Cost of Debt? 4.424% 6.422% 2.654% 3.465% 4.193% 5.307% 5.600% QUESTION 16 "When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm's cash flows as hita.edu/webapps/assessment/take/launch.jsp?course_assessment_id=_114822_1&course_id=_89168_1&content_id=_2391361_1&step=nu QUESTION 14 "The FIN340 Company is evaluating the purchase of 2 competing machines and wants to choose the machine with the lower equivalent annual cost (EAC); Machine A has an upfront purchase price of $380,000, an annual operating cost of $22,800 and a machine life of 5 years.; Machine B as an upfront purchase price of $475,000, an annual operating cost of $23,750 and a machine life of 7 years; If our company has a WACC of 11.6%, which machine has the lower equivalent annual cost (EAC) and what is its EAC? "Machine A/EAC = $463,010" "Machine B/EAC = $584,778 "Machine A/ EAC = $127,173 "Machine A / EAC = $126,514 "Machine B / EAC = $127,173" "Machine B/EAC = $126,514" Insufficient data provided to compute answer OOOOOOO QUESTION 15 "The FIN340 Company bonds are current trading at 103.0% of par (Par Value is $1,000) with exactly 15 years remaining until maturity and a 5.6% coupon rate; The company's tax rate is 21.0%. What is the company's After-Tax Cost of Debt? 4.424% 6.422% 2.654% 3.465% 4.193% 5.307% 5.600% QUESTION 16 "When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm's cash flows as

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Multivariate Methods And Forecasting With IBM SPSS Statistics

Authors: Abdulkader Aljandali

1st Edition

3319564803,3319564811

More Books

Students also viewed these Finance questions